@blue
It was an error on my part. I had been looking at it since around Rs. 40 earlier this year when it consolidated around there but I allocated money elsewhere hoping id be able to buy it around Rs. 35 (every rupee mattered since I put in a huge amount for dividend plays). It subsequently shot up above Rs. 50 in February instead and I never got a chance. I’m not kicking myself since the aim of the dividend play portfolio is to buy and hold for decades and let the money grow slowly but also gain from a second salary as such(15+ cagr from points of entry ideally)… Pnb gilts felt more like a play wherein I would have to exit at some point and figuring out what that point was depended on factors I couldn’t predict(interest rates). With the likes of reits, itc and even oracle and Rites I felt a lot more comfortable with the thought of locking money in for a decade+ since there were tangible things like real estate, Fmcg, client acquisition etc to track. Looking back I just didn’t understand gilts business all that well to know I wasn’t going to lose money. It may have well been the best capital protection and even appreciation and second income play of my lifetime at those levels and I missed it so I get annoyed when I look at it now lol.
Dear Malcom, Any particular reasons for not having exposure in Brooksfield Reit. Currently their yield is amongst the best of other two Reits and portfolio is concentrated on OT Office space. Management is professional with proven track record. My preference currently is Brooks field followed by Embassy if it comes below 310.Growth of both are similar for next decade and may be Post Tax return of Brookfield will also improve along with their cost of funds…
Nice to know you also have first hand experience with a Music Studio as well! Also, it takes courage to correct once mistake at much higher levels…Cheers to that!
Myself, ever since I had researched on global media giants like Disney etc. few years back, had been on serious lookout of IP/brand/content owners in India which tick all the right boxes for meaningful allocation…haven’t found my bet yet…
You may be right here with the demerger, music focussed Tips would be less risky asset.
Whichever media company I analyzed in India, each has somekind of issue or another…
Most recently I was on the lookout of a digital content asset with a serious emerging OTT play…there are few…and closest match looked maybe a Sun TV with their strong dominance in regional language content and emerging OTT…but other boxes did not tick…
Would be good to know your thoughts on emerging OTT platforms of Indian media companies…Thanks
@Investor_No_1
I personally can’t see any listed Indian OTT platform competing with the likes of Netflix, Disney etc in the film space and Spotify and even YouTube etc in the music space. They may start platforms and survive but I dunno how they’ll thrive. Content is the main draw in this current era for these kind of platforms to survive and with relatively smaller libraries I can’t see small competition ever threatening the big guys. So I prefer bets that can live alongside these huge OTT platforms ie supply the likes of Spotify with content. . And Hence why I like tips. They don’t need their own OTT but they are a proxy to growth of the bigger platforms since their music is licensed to them. Spotify doesn’t create its own content like Netflix either so i prefer the music angle more than film.
Yup I had a small studio as a side hustle about 8 years ago. A small room in my house with audio recording equipment for me to record music for a few local non profit films and customers for their albums is a better description and I ran it as a play to benefit from IFFI here in my state… It was too time consuming and lumpy for my liking and so I gave up on it and concentrated on my main venture but I learnt a lot regards licensing and how to make profit in the industry so hence why tips resonates with me. BTW @Investor_No_1 I’m enjoying your posts in your new thread and saw mention that you have your own portfolio thread before it got locked. Can you direct me towards your portfolio thread please… Haven’t been able to find it and would love to have a look. Cheers
@amitvohra
Brookfield isnt tax efficient. So the yield is actually 70 percent of what’s announced. The yield is 12.75 per unit for 8 months and 19 Rs pre tax which isn’t very enticing at cmp. They also have about 40 percent exposure to haryana if I’m not mistaken and I’m not comfortable with that due to reservation bills and the fact I prefer owning real estate in Mumbai and bangalore and other metros. I would consider Brookfield at under Rs. 200 but not higher personally. They have better occupancy rates vs the rest in covid and they could change their tax structure in the future but I’m still not comfortable here at anywhere near current cmp regards risk vs reward ratios
Hi Malcolm, I am a diligent reader of this thread and learned a lot.
I have also been reading about the Music IP industry and I started with Saregama, I am really amazed by how they have turned around this forgotten company since the appointment of new CEO Vikram Mehra. They also have the largest music catalog although most of them are retro but they are now heavily focusing on new music acquisition to stay relevant in the market down the line. And their movie production arm Yoodlee has also been doing good and coming up with good content.
What I wanted to know that how did you decide to go with Tips and not Saregama, what has been your reasoning for this investment.
I think above are two very significant points, agree with your thought process.
Among all Indian media firms, why I liked Sun was because over long term, I can see only its OTT thriving alongside Netflix of the world because of strong regional language dominance. Netflix/Amazon would be too busy with English & Hindi while a Sun can make progress in South Indian original content. They are investing significantly in their OTT as well…but other boxes did not tick here…regarding other players like Zee, Sony, Eros…I agree competing with Netflix and Amazon would be a herculean task…
Thanks for your kind words…I was really confused what all happened in my that simple thread 
I had started that thread to be my portfolio thread only and I don’t have any other portfolio thread currently where I write. Now since its locked citing reason that its under Q & A etc, I started a new one under Investment Strategy where gradually I will write about my portfolio stocks…all major ones for sure! Your thoughts & discussions would always be welcome! I have and am learning a lot by discussing with you…Cheers!
@naquib_alam
Saregama looks good but I can’t but help like feeling I’m overpaying at current levels. There are businesses within saregama I have no interest in(I’d rather not wait for a potential future demerger) tracking whereas post demerger Tips is a purely music business and makes it easier to track and for the market to value it. They may have a smaller library but they have monetised it well and have doubled the spend on acquiring new music from this year. Getting such a high margin, pureplay music business at just 20 times expected earnings made me feel I was underpaying with tips even after it’s nearly 10x runup but I don’t get that feeling with saregama.
I could be very wrong here but atleast if I go wrong with tips industries il know why… Doesn’t mean saregama isn’t a good option too but there are too many moving parts for me. If one were to extrapolate q4 earnings of saregama its at 30x and tips which should hit 50 crores with loss making films out is at 20x. This is a stupidly easy business to run… Monetize songs… Buy new songs… Monetize those… Enjoy huge margins and huge roes… Done. Management quality in this business doesn’t make a huge difference for me as long as they don’t cheat us and I don’t see signs of that . Saregama looks like they are trying to make things a bit complicated and I’m not confident that what they are trying to do with carvaan etc will work in the long run and hence why I prefer tips. I also had a nice buying opportunity in tips after the crash though I have a feeling I’m a little late to both parties considering the huge runups lol.
Btw The tips industries thread here in VP is just fantastic regards putting all the info needed to build a thesis in one place.
Hey Malkd,
Since you are bullish on REITs wanted to get your thoughts on how you are looking at the possible WFH forever threat that is being talked about. Do you see merits in that and how are you dealing with that risk?
I am quite heavily invested into REITs and would love you hear what you think about this wfh risk.
@Rushil the reason we are getting Reits at 20 percent discounts to NAV is because of this fear. Usually in a low interest environment Reits would flourish but we are getting discounts due to fears of occupancy hits due to WFH. Its upto each one to take a personal call but from what I’ve seen WFH is being touted by employees… Reddit and social media are filled with the benefits of work from home but from the corporate side you’ll hear nothing apart from a few forward thinking companies. In fact if you listen to the Concalls of the Reits in India the likes of TCS are renewing their leases… Imo in a country like India WFH will be a luxury for some employees and a dream for most. Our corporate culture is such that the people who opt for office over WFH may see promotions faster… The Lower level employees may not have the facilities for the same at their houses… New employees need to be trained and watched over for the first few years… Most companies management and HR believe in cultures and strict rules and they live in fear of employees taking up side hustles/enjoying themselves on company time etc. At worst I can see a hybrid model where some employees will be given the leeway to work more from home but most will have to forget the WFH dream and go back to work. We may have smaller office spaces/layouts may change/ Reits may need to Open data centers instead of office spaces etc but I don’t see demand being hit permanently. There will be short term issues with occupancy but the way I see it if a tenant leaves a long term contract the Reits can get new tenants at higher priced contracts and so even if there’s a short term hit I don’t see any issues long term. Personally I’m expecting occupancy to go back upwards next year and this fear would have been all for nothing. Reits would have been able to borrow at low rates in this environment too and they all have headroom for this so they can come back stronger. Buying at 20 percent discount to NAV allows this short to medium term hit to be softened imo… Even if demand stalls and prices of land and rents slow down their rate of increase buying them at a discount will make up for that. Its exactly the reason I loaded up on Embassy at 306 (NAV above 380) and Mindspace at 275(NAV around 345) but will not be adding any more until the next time we get them at these rates(probably if interest rates rise by a crazy extent) though I believe these were once in a lifetime opportunities to get these assets at these prices and lock in unbelievable long term post tax rates and capital appreciation as they slowly revert to a small premium to their NAVs(which will also increase slowly but surely due to new assets being bought at low interest rates even if the value of land itself stays stagnant) in a few years. Its rare to buy something for the long term at a bottom of a cycle with no upsides were priced in at all and that I’m sure will inevitably reverse(though the time line may be extended).
I just asked myself a simple question… Would I buy an office piecemeal without a loan in the main metros if they were selling at distressed levels and I had a professional management handling leasing… And the answer was yes. It will be a long wait with muted returns but the asset itself is worth the wait over a long time span ie a decade+
Whenever I feel I’m going a bit astray and getting greedy i go back and re read one of my favorite books in investing ie Parag parikhs value investing and behavioural finance… And it always gives me pause.
I have tried to stay away from speculative, highly valuated bets and market frenzy for this whole past year(and decade) avoiding ipos and the latest tech stocks etc but when I look deeply at my last 4 additions ie just dial, borosil, ugro and tips I have realised that maybe I have fallen victim to the frenzy too even without realising it.
With all 4 of them I have rationalised that they are cheap by paying now for the companies they will become in a few years and not for the companies they are currently and this is a dangerous road to thread in this current market.
My search for underpriced bets has led me to want to spend my remaining cash on deepak fertilizers and rspg ventures… 2 companies I am very bullish on but I’m slowly realising how overconfident I feel about all of these 6 companies that most would find risky right now and that scares me.
I have managed to catch lightening in a bottle with buying the likes of Laurus, Deepak, Ingrevia etc early alongside dividend plays like ITC, Embassy, Oracle etc at low prices and those current bets alone will see me reach my financial goals considering they take up nearly 95 percent of my wife’s and my portfolios so taking risks now to add to my portfolio doesn’t make any sense.
So I am deferring my plans to buy Deepak and rpsg(their sharp run ups helped make this decision) and any other bets and I have made the conscious decision to save cash from now on and open a few FDs atleast until year end until real life ie business and covid have a clear visible runway.
I am not expecting or waiting for a crash or a bear market… Timing the market is futile… If that does happen though I will deploy my cash at reasonable valuations…if it doesn’t il enjoy the compounding of my current PF without really missing on much but with peace of mind … So win win.
However, I do not want any additional cash tied up in the market in its current stage when I already have enough to meet my goals and can use it for expenses and emergencies instead.
The risk reward right now in my case doesn’t seem favourable.
So basically, Whatever money is already invested in my core companies will stay invested no matter what but there will be no additional spending and I’m going to revisit my thesis in all of borosil, tips, just dial and ugro and ensure I’ve not got anything wrong and will let go wherever I see too much speculation.
Sometimes playing defensive is the best option… Every bone in my body is telling me to invest more but my instinct says being careful right now may be the best approach and I feel this prolonged bull market has made me forget how brutal the stock markets can be.
This feeling of uneasiness began when I began letting go of clear cut opportunities like acrysil at 300, Angel at 550, edelweiss at 55, pix transmissions at 420 and of late deepak fertilizers and Rpsg ventures… I began questioning myself and trying to figure out why I wasn’t taking them and I realised the reason through self introspection(and parag parikh). Right now my priority is to protect my core portfolio and dividend plays at all costs and not touch a single share there and the best way to do that is by keeping a cash buffer to prevent real life emergencies(covid, business, lockdowns) from interfering with compounding.
Thanks to the gems that are continually available to research on this forum thanks to the posters here I’m sure that whatever opportunities I give up now il be able to find good ones later too whether we are still in a bull market year end or in a bear one. Cheers.
It’s great to read threads like this. Such clear thought process which is well documented and relatable too.
Thanks @Malkd for a very good thread.
I guess I too face a similar situation, I reduced my portfolio stocks from 38 to 13 in May 2020. Now after May 2021 again I hold around 10+20+11=41 stocks. This bull market is going into my head. I have been investing in markets from Demonitization. So still a new bee. I am finding it very difficult to streamline and stick with the same strategy. All 41 stocks are in green in my portfolio and it is now difficult to sell even one. And I am fully invested and one good part is I am not leveraged. Your post was an alarm to think what happened with my portfolio and realign with the strategy.
@Malai_Subramanian
I have kept a goal in mind at a set of rules and sometimes that’s the most important thing.
If I ignore either then I’m lost. Il explain a bit more in detail…
My business and my wife’s business cost X amount to run per month due to rent/employees/marketing/advertising etc… When covid hit we were suddenly left with liabilities but no income coming in(and our businesses turned profitable just 3 years ago so savings were nt great post investment in those) . I used to invest in the stock market but used to be a safe player with big names and with small capital since the money had other priorities ie business. When our main sources of income got hit I realised that for us to ever feel secure we needed to create alternate sources of income that would cover X business expenses so we could run our businesses for free. At the same time we had rising liabilities from our stalled businesses (though debt free luckily) . So I studied all I could and took calculated concentrated risks with our lumpsum that was dwindling every month due to liabilities and thanks to this bull market and some fantastic opportunities my portfolio has reached a point where I can cover my 0.5 X business expenses if I were to put it into debt funds as a side income. In 2 to 3 years I’m hoping it covers the full x business expenses. My wife’s business wasn’t so badly affected and currently her dividend play PF already covers 0.5 X expenses. At this run rate we should be stress free in 3 years and then can grow our businesses without worrying about a black Swan event again which is our main goal. Since I’m on track for that goal I can sit back and relax a bit and stop taking more bets but this past year has forever changed me and I don’t think il ever be able to give up looking for companies to invest in lol.
Its been a tough year but I finally feel like the goal is on track and will be met in a few years and anything I do now will be for greed and not my goals. So I’ve taken the foot of the gas so to speak.
Hopefully next year I can just continue building our portfolios again calmly and with a set amount every month when our cash flow is back and I don’t have an existential threat hanging around our future haha
Good to know your goals. Wish you good luck. Hope this rally never stops.
My goal is simple, sleep well, don’t lose money and let money compound at its own rate. I am still in capital building stage. The plan is to complete it in another 3 years.
I have experienced 2 bear markets now and just one bull market and the bull market is trickier, it gives us this rosy picture of the stock market where we start feeling like we will always get positive returns no matter what stock we invest in and we forget about how quickly money evaporates in a falling market. It’s really difficult to concentrate on you companies and why you bought them in the first place when every other stock is hitting upper circuit and I keep thinking about how if I had bought a different company I would have made so much more returns. Whenever I fell the urger to sell one of my holdings to buy another or feel FOMO looking at some other stock’s return I look at my winners and think to myself “atleast I got this one right, so what if I missed the other one” this helps me a lot in avoiding any irrational bets.
@d.investor
I almost miss the bear markets tbh. Waiting to buy a company only to see it run off is very difficult and considering I was still actively trying to put more money in the bull market became almost annoying. A slow bear market would suit siping slowly into a company and I’ve already mentally prepared for that incase this momentum slows down. These days you need to make decisions almost too quickly else they run off. Anyway now that I’ve decided to hoard cash I can sit back and enjoy the price rises in my current PF. If the sensex nose dives to around 40000 or if there’s a sharp 25+ percent drop in my target companies il consider putting cash back in. Until then il just be waiting for quarter results and sitting tight. You are right. We have some companies at once in a life time prices(hopefully) and should be happy with what we have. A 100 to 200 and even 300 percent buffer makes it easy to sit back and let compounding occur without much worry in secular sectors.
Good luck @Malai_Subramanian … I’m still in capital building stage too and hence why my 75 percent holding in Laurus and Deepak. If my PF doubles from here in less than a year and things look frothy in my individual stocks(with this current situation who knows) then il be moving towards booking profits and shift to capital protection but until then I wish both of us good luck.
Thanks @vibhor_vaish … Glad you get some value from my thread. Posting here helps me more than anything tbh since it forces me to stay clear headed and follow my plans since making it public almost gives me a sense of responsibility after haha.
So in continuation with my plan above and with a re read of Pat dorseys 5 investing rules and Nicholas taleb’s antifragile I have gone ahead and made the following changes and adjustments to my business and financial plans…
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I have decided that the most tax friendly way to have peace of mind for my business activities is to set aside the average 1 year expenses of my business of the past few years into an Fd… Which will be then be transferred to REITS or ITC or Invits if they sell at distressed valuations like earlier this year. Until then il be working to ensure that I have this amount of capital ie business expenses for the whole year freed up for this so that my business and core PF is fully protected.
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My business is currently facing covid headwinds(woo me starting a college/education business haha) which should go away by end of this year. I have set aside cash in an FD to take care of these business expenses for the next 6 months. Ive assumed this cash will probably all just disappear but if any remains end of year il move it into an Reit etc as above . For this purpose of raising cash assuming the worst for the rest of the year I have let go of what I felt were my speculative bets at profit ie Tips industries… and one of my favorites ie Just dial. I am still considering liquidating borosil renewables since it isn’t part of my core and I have no buffer here now but il decide that based on my working capital needs. I haven’t decided what to do regards my Idfc first balance holding too since my average price is around 50 and I’m not too happy with my MOS here and I need to raise cash from somewhere to increase my cash for the reasons mentioned above(since I dangerously had this cash that il probably need invested too!) . I am loathe to get rid of ugro capital so I have now officially moved it into my core portfolio mentally.
I have also taken up a long term unsecured line of credit with my bank ie an OD for my current account so that I can make small payments in emergencies if needed without touching my PF and savings… though the aim is to use this OD only if really, really needed and to improve my sleep haha. -
I sat and worked out my calculations and it will take me upto March 31st 2023 to save the amount of cash needed for point 1(since I also have some major one time expenses coming up next year and covid headwinds until end of this year) from my business assuming it runs full steam ahead in FY23 (and since I do not want to sell a single share from my core PF). What that means is I CANNOT at all costs add any more cash to my equity portfolio for a really long time.
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My entire stakes in Laurus Labs, Deepak Nitrite, Jubilant Ingrevia, Vaibhav Global, Intellect Design arena and Ugro capital will be going nowhere. I was lucky enough to get them early and my main goal now is to protect this stake here at all costs and is the main reason I’m trying to become antifragile elsewhere so that there never comes a reason to liquidate a single share here.
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If all goes to plan by April 1st 2023 I will finally be in a position where in my main portfolio will be protected and my business will be protected and I can start adding to my PF again every month without worrying. It will be a slow and long process and I’m probably going to miss out on incremental additions in the bull run of the century if it continues in this manner but this has to be done and I will benefit from it in a big way with my core PF being majority of my networth anyway. Also, I’m still young so missing out on opportunities for a year+ is nothing in the long run and il be in a fantastic position to take on as much risk as I want post this antifragile restructuring process in FY24 since I won’t need to put anything more into debt by then and can concentrate only on equity.
As I’ve said before… the bull run caused me to work in reverse order ie set up risky equity first and debt like funds later and now I have to start doing it since I’ve delayed it long enough. Luckily I’ve already set up my wife’s portfolio in this manner(though even better for peace of mind with dividends covering business expenses… Infact Im almost jealous looking at Oracle, Rites, Embassy, Indigrid and ITC and their 20 percent rises since my entry into them + high dividend payout haha ) . Now it’s time for me to do it and improve my financial health(I do miss salaries at times lol). All This studying of Companies made me realise I was a distressed company due to covid with not enough cash for working capital, no lines of Credit and no cash in long term securities for emergencies so studying my own balance sheet led to all of these changes… Ie to make myself something I would invest in long term
Due to all of the above I wont be as active as I have been in either the markets/ studying of companies or even these forums for a really long time (except for quarter results and to build a watch list for later) since I don’t plan on buying or selling anything for more than a year so if I’m late in responses from here on in do bear with me. Thanks to all of you for reading and helping throughout this crazy year. Cheers again.
Note: Just in the way I like investing in companies at little to no downside with no upward surprises priced in and Conservative management protecting downsides instead of chasing fast upsides… I am also assuming the bearest of cases here for me ie no income for the rest of the year and a covid 3rd wave disrupting plans for even longer plus a slow FY23 getting everything back on track along with a slow growing PF that I cannot dilute at frothy valuations to quicken the goal of my safety net. Any upside surprises and my plan will have a shorter time frame.
Appreciate the clarity of your thought process and the way you write it down! On lighter note, your mind works so fabulously in managing money, equity or debt alike, do you really need the other business? Just out of box thinking of liquidating the businesses related asset and managing that financial asset to grow further. If at all you need to do anything in education, you can follow the asset light mode of online…that would free up your cash as well as time!
I know, I should not comment on your business but as you share with so much clarity and I could see the excellent way you manage money, I felt maybe you can generate better CAGR in managing money than in many good businesses…also its just on lighter note!
Wish you good luck and would be great to know your thoughts!! Cheers!
Thanks @Investor_No_1 … I have spent years building a very sticky business and setting up relationships with colleges and schools all across my state and there’s nothing I enjoy more than taking seminars, classes and Counseling. So I personally feel lucky enough to have made a profit making business at a relatively young age ie early 30s vs what I’d actually forecasted. Obviously the past 1.4 years have been horrible since all colleges and schools along with my classrooms have been shut but I know for a fact that in 2 years il be back to where I was in 2019(1 year for covid… And 1 year to re establish all my ties with colleges and schools). I had already planned for contingencies a few years ago and kept online only as an option in the worst case but its not as profitable and my expenses are still the same as offline so I’m just waiting for covid to go and Continue with what will be a more asset light hybrid model.
Regards finance… I don’t have the qualifications unfortunately and it would take me years to get them. I also would know if I’m actually good at this only a decade from now since I invested passively in blue chips and big names in the previous one. And while I love everything about investing and finance I love the fact that I’m free to do it for myself and my family and some friends without worrying about appeasing clients. I want to do it because I love owning businesses and seeing them grow … That’s it. With my 75 percent stakes in Laurus labs and deepak Nitrite for eg they are my business now no matter what the actual board of directors say about it haha. I just want to see them grow over the next decade and hit their targets and be a part of it and take whatever ups and downs come with it(and that’s why I love ugro too… There’s so much work to be done and things to track and I’ve started with the owners there! ). Getting wealthy from it is obviously a desired outcome but it isn’t what I am concentrated on since it will happen anyway alongside the business growth and not just temporary market frenzies… Whereas that wouldn’t be the case with potential clients who wouldn’t care about the businesses at all. Same with an online platform like YouTube etc… I’d rather advise my own students about financial literacy face to face (which I get to do anyway) than give stock tips etc online. Anyway, il only know if I’m really built for this a decade from now. Cheers though
Will miss you mate, your thread is very informative and yet more fun. Reading your posts literally feels like talking to someone in real, lol. Best of luck.